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The Jist of Credit Scores

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If you’re even a day into you journey toward buying and owning a home, the topic of your credit score has doubtless come up. Credit scores can make consumers nervous. Here’s a number – a score on a test you may not have been aware you were even taking – and this number is part of the basis on which strangers will judge you and determine the outcome of a major event in your life.

Punctuation marks made of puzzle piecesThe purpose of a credit score is not puzzling. It is for institutions to have a way to predict the likelihood of a borrower repaying a loan. It’s used to determine who qualifies for a loan and to evaluate the potential risk for the lender. Your score, at a glance, gives a lender a good idea of your borrowing and bill-paying habits. Those habits are very interesting to any party about to loan you a substantial amount of money.

Credit bureaus find patterns and can see how scores correlate with lender experiences. They can provide insight into how likely a borrower is to default on a loan. The major credit bureaus right now are TransUnion, Experion, and Equifax. The Bureaus continually work on their algorithms to make sure they stay accurate through economic changes and laws.

Credit bureaus consider new credit, what types of credit you have, the length or your credit history, your payment history, and the amounts you owe. The most important emphasis is put on the amount you owe and your payment history.

It all boils down to this: a low score will be more likely to receive a high interest rate when borrowing money. That means having a low credit score will see you paying more in the long run on your home loan. The opposite, a high credit score, will mean lower interest rates. Take to your HomeSure lending agent today about ways you can improve your credit.


Matt Demorest, President

Matt is the President and Founder of HomeSure Lending. He has extensive experience working in mortgage, finance, business development, business operations and non-profits. Matt holds a Masters Degree in Youth Ministry Leadership. NMLS #1011726

All stories by: Matt Demorest, President

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